New Consumer Credit Act regulates BNPL to protect youth and vulnerable groups from debt, as household debt hits RM1.69 trillion
PETALING JAYA: The government has taken comprehensive steps to prevent Malaysians, particularly youths and vulnerable groups, from falling into excessive debt, including introducing regulatory oversight on buy now, pay later (BNPL) schemes under the newly enacted Consumer Credit Act 2025 (Act 873), Deputy Finance Minister Liew Chin Tong (pic) said.
Liew said Act 873, which will come into force this year, establishes a comprehensive regulatory framework for the non-bank credit industry, including BNPL providers that were previously not subject to direct oversight by any authority.
“The primary objective of this Act is to protect the interests of credit consumers and ensure responsible lending practices across the industry,” he told theSun via WhatsApp.
Liew said as of the end of September 2025, Malaysia’s total household debt stood at RM1.69 trillion, equivalent to 84.9% of gross domestic product (GDP).
Following the revision of the youth age definition to those aged 30 and below, youth household debt accounted for 7.8% of total household debt, amounting to RM132.4 billion.
He said unsecured debt among youths under 30, including personal financing and credit card debt, declined slightly from 8.1% in December 2024 to 8.0%, or RM10.6 billion, by September 2025, with the median age of young borrowers holding unsecured debt recorded at 27 years.
On BNPL usage, Liew revealed that the number of BNPL transactions surged to 243 million in 2025, with a total transaction value of RM21.3 billion.
“This represents a sharp increase of 66% in transaction volume and 78% in value compared with 2024, when 146 million transactions worth RM12 billion were recorded.
Youths aged 30 and below accounted for about 40% of total BNPL transactions,” he said, adding that BNPL services are commonly used for food purchases, groceries, transport and services, with an average transaction value of RM91.
A study by the Consumer Credit Oversight Board Task Force found that more than 70% of active BNPL users are from the lower-income group (B40), highlighting the need for stronger consumer protection measures, Liew said.
As at Dec 31, 2025, total outstanding BNPL loans stood at RM4.9 billion, representing about 0.3% of overall household debt.
Overdue BNPL amounts were recorded at RM160.2 million, or 3.3% of total BNPL loans, which Liew said indicates that BNPL-related debt does not pose a systemic risk at present.
Under Act 873, the Consumer Credit Commission will be established as the regulator responsible for monitoring industry compliance and enforcing consumer protection requirements. The commission will have powers to investigate, take enforcement action and impose penalties on non-compliant credit providers.
